Simplified and accelerated procedures - Hungary
Order of payment procedure
1. Order of payment procedure
Chapter XIX. of Act III. of 1952 on the Code
of Civil Procedure regulates the order of payment procedure. The procedure is
a non-contentious procedure, in which the court upon the unilateral claim of
the entitled person summons the debtor – without granting him/her a hearing
and omitting the procedure of proof – to comply with what has been put
forward in the claim or to raise an objection against it.
1.1. Scope of procedure
What may be the scope of the procedure?
- The claim may be submitted only for pecuniary claims or claims on movable assets. In the event of a pecuniary claim, only claims that are overdue and the amount of which is exactly specified may be enforced
- There is no ceiling regarding the value of the claim that can be enforced via an order of payment.
- In the event of a pecuniary claim exceeding the value of HUF 200 000, the creditor may initiate a proceeding of an order of payment or a lawsuit. If, however, the pecuniary claim does not exceed HUF 200 000, the application initiating proceedings will be dealt with by the court as an application for an order of payment. In the event of a claim on a movable asset the party is free to decide whether to enforce his/her claim by submitting an application or via an order of payment. If, however, he or she chooses the order of payment, under Article 315(1) of the Act on the Code of Civil Procedure it is obligatory to indicate alternatively the amount which the entitled person claims to receive instead of the movable asset (alternative application). According to the established practice, if beside the claim on the movable asset the value of the pecuniary claim indicated in the alternative does not exceed HUF 200 000, the court considers the application as a claim for an order of payment.
- The law rules out the issuing of an order of payment if the debtor, being a natural person does not have a domestic permanent address or place of residence, or the debtor, being a legal person (or company not having a legal personality) does not have a domestic seat – that is, if the known permanent address, place of residence or seat of the debtor is abroad, or if the whereabouts of the debtor is unknown.
1.2. Competent Court
Which court can be consulted with a claim for issuing an order of
The court having general
jurisdiction is entitled to issue an order of payment, that is the court in
whose area of jurisdiction the debtor lives or resides, or the legal person,
has its registered office. If his/her permanent address or habitual residence
is not known, it is not possible to issue an order of payment.
1.3. Formal requirements
What are the formal requirements regarding the claim for issuing an order of payment?
- The creditor must submit the claim for an order of payment in a written form, by using a special form for this purpose. The form can be obtained at the courts. The form consists of two parts, thus the requesting person has to present both the part concerning the submission of the claim and the part concerning the issuing of the order of payment. A party acting without a legal representative may present the claim before the court orally, as well. In such a case the court does not prepare a formal record but fills in the form in line with the claim. Claims must state:
- data from which the jurisdiction of the court can be determined,
- the name and permanent address of the creditor and the debtor (and their representatives),
- the claim to be enforced, its legal basis, amount and contributions and data and evidence serving as a basis for the claim.
- In the event of an order of payment procedure, representation by a lawyer is not compulsory.
- After the court, by issuing the order of payment, summons the debtor to comply, the court asks for the precise and unambiguous stating of the legal grounds, amount and contributions of the claim, and it checks its own motion that the claim fully complies with the legal requirements. If the claim does not comply with the minimum requirements, or some parts of the form were not filled in, the court asks the requesting person to remedy the deficiencies.
- As in the order of payment procedure the question of evidence does not arise, there is no need to provide written evidence.
1.4. Rejection of application
Under what circumstances may the application for issuing an order of payment be rejected? Does the court examine whether the claim is justified before issuing an order of payment?
An application for an order of payment may be rejected on the basis of points a)-g) or j) of Article 130 (1) of the Act on the Code of Civil Procedure. That is, the court may reject the application if:
- on the basis of a law or international agreement it can be excluded that the Hungarian court has jurisdiction in the case;
- the claimant's claim is within the jurisdiction of another court or authority or another court has jurisdiction in the case, but Article 129 may not be applied due to the lack of necessary data;
- proceedings by another authority must precede the trial;
- there is already an ongoing action between the parties based on the same factual basis, for the same rights – either before the same, or before another court - or a legally binding ruling has already been made;
- the party has no legal capacity in the case;
- the claimant's application is premature or – for some reason other than limitation - cannot be enforced by a court;
- the action is not brought by the person entitled to do so by law, or the action may only be brought against a person defined by law, or the participation of certain persons in the trial is compulsory and the claimant - in spite of a summoning - did not call on this person (these persons) to appear;
- the claimant did not submit the application received to remedy deficiencies by the deadline set, or it was submitted once again with deficiencies and so the application cannot be judged upon. The application for an order of payment is also rejected if the debtor's registered office or permanent address is unknown.
When administering the application for an order of payment the court also has to examine on its own initiative whether it has jurisdiction to issue the order of payment, and if necessary, it must establish the facts to an extent that enables taking a satisfactory stance on the question whether the case is within the court's jurisdiction.
At the same time the law enables the court to transform the order of payment procedure into a trial, that is to set a deadline for a hearing on the case if it believes that the application has no legal basis, its existence seems contestable or the application is made for the purpose of committing a criminal offence.
Can the applicant appeal against the rejection of an application for
issuing an order of payment?
application for an order of payment has been rejected, the applicant may take
the claim to a full trial. In theory, the applicant may appeal against the
ruling rejecting the order of payment, but if he or she submits the
application again, the effects of litigation remain.
1.6. Statement of opposition
In the case of issuing an order how much time does the defendant have
to contest the application? What
are the possible requirements of form for the contesting statement?
The debtor may contest
the application within 15 days of the serving of the order of payment. If the
debtor fails to do this out of no fault of his own, the consequences of the
failure can be remedied with evidence.
statement of opposition is a statement by the debtor saying that he or she
denies or opposes the legal basis or the amount of the application for an
order of payment and on the basis of this asks for a hearing, that is, to
transform the procedure into a full trial. Before the deadline for submitting
the statement of opposition the submission presented from the debtor is
considered to be a statement of opposition if it is clear from it that the
debtor does not accept or does not approve of the order of payment or the
part of it that demands compliance being given mandatory force. There are
thus no formal requirements for the statement of opposition. The only requirement
concerns the number of copies submitted, as the statement of opposition
always has to be submitted in one more copy than the number of parties
concerned by the proceedings.
1.7. Effect of statement of opposition
What happens if the defendant opposes the claim in time? Is the case included in the normal court proceedings automatically or at request?
The legal consequence of the statement of opposition submitted by the debtor or the person authorised by law is the following: the proceeding out of court, if the additional costs are paid and so the court costs are covered, will automatically become a trial before court. If additional costs are not paid, the court terminates the proceedings. The statement of opposition initiates the procedure. In the event of a statement of opposition the rules governing proceedings started with an application have to be applied, and the creditor is considered to be the claimant while the debtor is considered to be the defendant.
1.8. Effect of lack of statement of opposition
What happens of the defendant does not oppose the claim in time?
- If the debtor does not comply with the summons in the order of payment and does not oppose it before the deadline and in the prescribed manner, then the order of payment will have the same effect as a legally binding ruling. In this case the order of payment will become effective fifteen days after it was served. The legally binding order of payment means a judgment in the case, and until it is opposed with an application for retrial, no claim can be enforced on the same factual basis, for the same rights, between the same parties.
- The court provides the creditor with a copy of the order of payment with a clause for making it legally binding on the debtor, so this person does not have to take any further action in connection with the enforcement order.
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